8 Top Suburbs to Invest in Melbourne: A Smart Property Investors' Guide

Finding the top suburbs to invest in Melbourne is key to achieving strong growth, steady rental income, and long-term returns. For business owners and home-buyers, the right suburb can mean the difference between a profitable investment and a missed opportunity. 

Choosing the right funding is as crucial as picking the right location, and that’s where mortgage brokers play a vital role. Brokers connect you with lenders and tailor loans to match your goals, helping you tap into Melbourne’s thriving real estate market.

Let’s explore the top suburbs that offer the best potential for property investment in Melbourne, including how to choose one that fits your financial goals.

Why Melbourne Is a Hotspot for Property Investment

Melbourne continues stands out as a prime destination for both homeownership and property investment. Here’s why: 

• Robust Economy and Population Growth: Melbourne's economy has grown significantly, with a Gross State Product of $568.9 billion in 2022-23, surpassing countries like New Zealand. Its population reached 5.316 million in 2024, a 1.55% increase from the previous year. This economic and population growth fuels strong demand in Melbourne’s property market, creating excellent opportunities for investors.

• Infrastructure Development: Melbourne's major infrastructure projects are enhancing connectivity and liveability, boosting its appeal for property investment. The $15 billion Metro Tunnel will expand rail capacity by 2025, while the $10.2 billion West Gate Tunnel will ease traffic in the western suburbs. Ongoing projects like level crossing removals improve safety and accessibility, driving property values and rental demand in key suburbs.

• Lifestyle and Education Opportunities: Melbourne’s leafy suburbs provide excellent amenities and access to reputable schools, creating strong demand for housing and rentals. Balwyn North, known for Balwyn High School, is highly sought after by families. Glen Waverley, with its vibrant dining scene and top schools, attracts both families and professionals. These features make Melbourne's suburbs consistently appealing with great investment potential.
  

Top 8 Suburbs to Invest in Melbourne

Melbourne’s dynamic property market offers excellent opportunities for both investors and those seeking homeownership. Here are the top 8 suburbs that promise strong potential for growth and returns.

#1 Essendon: A Blend of Heritage and Modernity

Located just 8 km from Melbourne's CBD, Essendon combines historic charm with modern amenities, making it a sought-after suburb. Its tree-lined streets, heritage architecture, and vibrant cafes and shops appeal to families and professionals alike.

Reputable schools like Essendon Primary and Penleigh and Essendon Grammar make it ideal for families seeking quality education. Parks like Queens Park and excellent sporting facilities add to its lifestyle appeal. 

Strong owner-occupier demand and convenient public transport links drive consistent growth in property values, making Essendon a top choice for investors and homebuyers.

#2 Ferntree Gully: Family-Friendly with Natural Appeal

Located 30 km east of Melbourne's CBD, Ferntree Gully is nestled at the foothills of the Dandenong Ranges. This suburb offers a serene environment with ample recreational facilities, including access to the Dandenong Ranges National Park. 

The area is well-served by public transport, with a local train station providing convenient access to the city centre. 

Ferntree Gully's family-friendly atmosphere and natural beauty make it an attractive option for both investors and homebuyers seeking long-term growth potential.

#3 Flemington: Proximity and Potential

Just 4 km from Melbourne's CBD, Flemington is a vibrant suburb with excellent connectivity through trains, trams, and buses, making it ideal for city commuters. Its range of amenities, including Flemington Racecourse, local shops, and cafes, enhances its appeal for renters and investors. 

The suburb’s strategic location and ongoing infrastructure development boost its potential for capital growth. With diverse housing options, Flemington attracts both seasoned investors and first-time buyers seeking long-term returns.

#4 Berwick: A Thriving Suburb with Family Appeal

Situated approximately 41 km southeast of Melbourne's CBD, Berwick offers a harmonious blend of historical charm and modern conveniences. The suburb is renowned for its excellent educational institutions, including Berwick Primary School, Kambrya College, and Nossal High School, catering to families seeking quality education. 

Residents enjoy a wealth of amenities, such as the Eden Rise Shopping Centre and the picturesque Wilson Botanic Park, providing ample lifestyle options. With convenient access to the Monash Freeway and a well-connected train line, Berwick ensures easy commuting to the city, making it an attractive option for both investors and homebuyers.

#5 St Kilda: Iconic Beachside Living

St Kilda, just 6 km southeast of Melbourne's CBD, is one of the city’s most iconic suburbs, offering vibrant beachside living with a rich cultural scene. The suburb is famous for St Kilda Beach, a hotspot for water sports, outdoor activities, and stunning sunset views. 

Acland Street is a bustling hub of cafes, bakeries, and shops, adding to its appeal for both residents and visitors. St Kilda also boasts excellent public transport connections, with trams and buses providing convenient access to the city centre. 

Its mix of historic homes and modern apartments makes it a prime choice for both investors and homebuyers seeking a lively yet scenic environment.

#6 Brighton: Affluent Coastal Living

Located 11 km southeast of Melbourne's CBD, Brighton is an affluent suburb renowned for its picturesque coastline and luxurious lifestyle. The area features the iconic Brighton Bathing Boxes along its pristine beaches, offering scenic views and recreational opportunities. 

Brighton offers vibrant shopping precincts like Church Street and Bay Street, featuring cafes, restaurants, and boutique shops. Excellent public transport, including Sandringham line trains and buses, ensures easy access to the city.

Brighton's combination of coastal charm, high-end amenities, and proximity to Melbourne's CBD makes it a highly sought-after location for both investors and homebuyers seeking a premium lifestyle.

#7 Werribee: Growth and Development Hub

Located 32 km west of Melbourne's CBD, Werribee is a rapidly growing suburb benefiting from significant infrastructure development and urban planning.

Affordable properties, combined with major projects like the Harpley Estate, are attracting both investors and homebuyers seeking value and growth potential. The suburb's strategic location offers convenient access to the CBD via major transport links, making it an appealing choice for commuters. 

With a wide range of amenities, including schools, shopping centres, and recreational facilities, Werribee is positioned for long-term growth and continues to attract strong interest in the property market.

#8 Brunswick East: Vibrant and In-Demand

Brunswick East is highly sought after for its proximity to major landmarks like hospitals, universities, and the iconic Melbourne Zoo. Its vibrant community, characterised by trendy cafes, restaurants, and local markets, creates a lively and welcoming atmosphere. 

The suburb's excellent public transport links and close access to the CBD further increase its appeal for both renters and buyers. With a diverse mix of housing options, including apartments and family homes, Brunswick East attracts professionals, students, and families alike, making it a versatile and popular choice for property investment.

How to Choose the Right Suburb for Your Investment Goals

Selecting the right investment suburb requires careful consideration of key factors. These tips will help you make informed decisions and maximise your investment potential.

• Property Type: Determine whether detached houses, units, or other property types suit your goals. Standalone houses in established suburbs often provide better potential for capital growth and long-term stability.

• Growth Potential: Focus on suburbs with consistent growth and historical growth supported by infrastructure upgrades. Suburbs in middle ring suburbs or outer suburbs often show strong growth potential.

• Rental Demand: Check rental demand by assessing vacancy rates, median rent, and tenant demographics. Suburbs with strong demand for rental property ensure steady rental income and cash flow.

• Proximity to Amenities: Prioritise locations with convenient access to shopping centers, public transport, and recreational facilities. Suburbs near reputable schools and job hubs often attract renters and buyers.

• Market Trends: Stay updated on property market trends, including median property price and median unit price changes. Consulting a real estate agent or financial planner ensures you capitalise on investment opportunities.

• Long-Term Growth: Look for areas with long-term growth potential driven by population growth and new infrastructure projects. Suburbs like Glen Waverley and Melton South often benefit from steady property values and future long-term growth.

FAQs

What are the top suburbs to invest in Melbourne?

Essendon, Brunswick East, and Werribee are just a few of the popular suburbs offering strong growth and high demand for housing.

Why is Melbourne great for property investment?

Melbourne’s robust economy, population growth, and infrastructure upgrades make it a top choice for long-term investors.

How can I find the best investment suburb?

Focus on suburb profiles, median property prices, and future growth potential. Professional advice can help refine your options.

What is the median house price in Melbourne’s top suburbs?

Median prices vary by suburb, with affordable suburbs like Frankston offering homes around $742,500 and Essendon exceeding $1.6 million.

Is Melbourne’s rental market strong?

Yes, the rental market is steady, with rental demand fueled by population growth and limited vacancy rates.

Should first-time investors focus on affordable properties?

Starting with affordable housing options is smart for first-time buyers, ensuring manageable costs and solid growth potential.

How can a mortgage broker help with property investment?

An expert broker can guide you through loan options, assess your financial position, and connect you with investment opportunities tailored to your goals.

Conclusion

Melbourne’s property market is filled with promising opportunities, especially in its most sought-after suburbs. Whether you're looking for strong growth, vibrant communities, or excellent amenities, the right suburb can set you on the path to achieving your investment goals. 

Our experienced team at LM Connect is here to guide you every step of the way, ensuring you find the perfect property and financing solution. Reach out today at lmconnect.com.au or call 0423 713 362 to start your journey toward a successful investment.